Canada has withdrawn its decision to impose a digital service tax (DST) on US technology companies late Sunday night. The Canadian government was going to impose a digital service tax on US companies from June 30. Canadian Prime Minister Mark Carney said in a statement on Sunday that he and Trump have now agreed to resume trade talks. According to the Canadian Finance Ministry, negotiations between Carney and Trump on a trade agreement can start again by July 21. Trump had threatened Canada on June 27 that if it imposed taxes on US companies, they would soon impose a new tariff on Canada. Trump posted on Truth Social and said, ‘We will tell Canada in the next 7 days how much tariff it will have to pay to do business with the US.’ Digital Service Tax was passed in Canada last year
The Digital Services Tax Act was passed in the Canadian Parliament on June 20, 2024 last year. However, this tax was to come into effect a year later from June 30, 2025. Just hours before its implementation, the Canadian government took a U-turn on it. After Trump withdrew from the talks on tariffs, Canadian PM Mark Carney had said that he wanted to continue talks with the US in the interest of the people of Canada. At the same time, US Treasury Secretary i.e. Finance Minister Scott Bessant said that he had already feared the imposition of this tax. However, talks were going on between the US and Canada regarding tariffs, so he hoped that the Carney administration would not implement it. What is digital service tax?
Digital Services Tax is a tax that is levied on companies providing online services. Large foreign and domestic companies, which are earning money from online users in Canada, will have to pay 3% tax on income. This law was also to be imposed on bills older than 2022, that is, companies would have to pay tax money for the past several years. This tax was going to be applicable on income from online marketplaces, social media, online advertising and selling user data. This tax would have been applicable on companies whose annual income is more than $ 800 billion. This would have particularly affected American tech companies like Meta, Google, Apple, Amazon and Microsoft. Businessmen estimate that this tax will cause American companies to lose more than two billion dollars every year. Along with this, 3,000 jobs can also be lost in America. Tariff war harms both US and Canada
According to data, Canada is America’s largest buyer, which bought US goods worth $349 billion (Rs 29.14 lakh crore) last year and sold goods worth $413 billion (Rs 34.49 lakh crore) to America. Canada is America’s second largest business partner after Mexico. Canada escaped Trump’s comprehensive tariff imposed in April, but it still has to pay 50% tax on steel and aluminum. If both countries impose tariffs on each other, then the economy of both will suffer. Trump has imposed tariffs on Canada earlier as well
Trump had imposed several tariffs on Canada during his first term. Then there was a threat of imposing a 25% tariff on all Canadian exports, but most Canadian goods were exempted from that tariff if they followed the USMCA (America Mexico Canada Agreement) agreement. The USMCA agreement is a kind of free trade agreement that the Trump government brought in the year 2020. Earlier in the beginning of the year, Trump had threatened Canada that if it did not agree to the conditions of America, then he would put economic pressure on it. After this, in April, Trump imposed a 25% tariff on many Canadian goods, in response to which Canada also imposed a 25% tariff on many American goods. However, later it was postponed for some time after negotiations. …………………………………….. Also read these news related to Donald Trump… Trump said that we signed a trade deal with China yesterday, now it is going to happen with India. A ‘big’ trade deal is going to happen soon between India and America. US President Donald Trump said this at the ‘Big Beautiful Bill’ event held at the White House. Trump told that recently America has made a trade agreement with China and now something similar is going to happen with India. Read Full News… Trump to now impose tariff on medicines, Granules, Lupin, Laurus Labs shares fall up to 4% US President Donald Trump said that he is soon going to impose a heavy tariff on the import of medicines. After his statement, on 17th June, shares of Indian pharma companies fell up to 4%. Nifty Pharma index fell down by 2% to the level of 21,600. Shares of Granules India, Lupin, Natcopharm and Aurobindo Pharma fell the most by up to 4%. Read Full News…
